Headlines

Canada’s top securities regulator ordered the founder and four former executives of bankrupt Chinese timber company Sino-Forest to pay 76.3 million Canadian dollars (US $58 million) in penalties and forfeited compensation for their role in what regulators say is one of the largest frauds in Canadian history, The Wall Street Journal reported. The Ontario Securities Commission ordered Allen Chan, the company’s founder and former CEO, to repay C$60.3 million of salary and bonuses earned before the company filed for bankruptcy in 2012.

Britain has given up trying to keep full access to the European Union market for its giant financial services sector after Brexit and instead will push for an easing of existing rules, the Financial Times reported. Prime Minister Theresa May's latest plans for Brexit, which will be published in detail on Thursday, show that London will seek a looser partnership with the EU in the financial services sector than its current ties, the newspaper said, the International New York Times reported on a Reuters story.

When a beloved regional beer ramps up production, there’s always a question of whether it can gain new fans without losing what made it special. Something similar is happening with a German debt instrument known as Schuldschein, a hitherto hidden corner of the market where borrowing has tripled in recent years, Bloomberg News reported. Not quite a loan and not quite a bond, the traditional Schuldschein was hammered out by local lenders for solid local manufacturers. Now companies like Volkswagen AG, ArcelorMittal and U.S. paintmaker Sherwin-Williams Co.

Foreign investors are zeroing in on health-care and consumer stocks and ditching some old favorites, as they sift through the spoils of a $2 trillion selloff in China’s equity market, Bloomberg News reported. Companies exposed to China’s growing middle class and resilient to external turbulence like the trade fight are popular picks for foreigners investing via trading links with Hong Kong. Liquor maker Kweichow Moutai Co., Han’s Laser Technology Industry Group Co. and Jiangsu Hengrui Medicine Co. are among those in demand, while Gree Electric Appliances Inc.

South African Airways pledged to urgently begin a search for a private-sector partner to help turn around the troubled state-owned carrier and ease the burden on an already stretched National Treasury. The assurance followed an attempt by the Solidarity union to end SAA’s reliance on state funding and push the airline into business rescue. The carrier hasn’t made a profit since 2011 and last year needed a bailout to avoid a default on borrowings, Bloomberg News reported.

House prices across the eurozone are rising at their fastest since before the global financial crisis, forcing the region’s banks to squeeze the supply of credit to would-be mortgage holders, the Financial Times reported. Eurostat reported on Tuesday that house prices in the 19-member currency area rose 4.5 per cent in the year to the first quarter of 2018 — a level last seen in early 2007. Five countries — Latvia, Slovenia, Ireland, Portugal and Slovakia — saw double-digit price rises.

Dismal news for French manufacturers in May, who saw industrial production fall by 0.2 per cent compared to April as the sector registered a quarter-on-quarter decline, the Financial Times reported. The decline was below the 0.7 per cent rise expected by economists in a Reuters poll, and followed a 0.5 per cent fall in April, according to data from Insee. Over the quarter, manufacturing output in one of the eurozone’s biggest economies fell by 0.5 per cent, while overall industrial production fell by 0.8 per cent.

Asian stocks extended a global rally, with a weaker yen helping Japan’s Nikkei close up 0.7%. Benchmarks in Hong Kong, South Korea, Indonesia and Singapore also rose, The Wall Street Journal reported. However, indexes in mainland China were little changed, after large gains Monday helped temper a recent rout. China’s developers have enjoyed years of robust growth, expanding aggressively to take advantage of cheap debt and a housing boom.

People who work in high finance tend to develop the belief that they know a lot about business, that in fact they are better at business than regular businesspeople, a Bloomberg View reported. This is an understandable belief. The financial industry is a sort of meta-business. Successfully investing in or lending to companies requires you to understand their underlying business, and the deeper your understanding the more confident you will probably be in your investment.

Energy supplier Viridian has won an appeal against changes to the electricity generation licence for its Huntstown power plants, raising hopes that they can remain open and save 40 jobs, the Irish Times reported. Viridian warned earlier this year that it would have to close the Co Dublin plants after one facility failed to secure a contract for new payments from national grid operator EirGrid in an auction overseen by the Commission for Regulation of Utilities (CRU).